SBI MF targets to mop up Rs 150-200-crore from gold ETF

SBI Mutual Funds, the joint venture between State Bank of India and Societe General AMC (France), is targetting to mop up Rs 150-200-crore from its new SBI Gold Exchange Traded Scheme (SBI GETS), a top company official said.

"Based on current market conditions, our current expectations is that in the initial stage we should mobilise around Rs 150-200-crore," SBI Mutual Fund's Chief Marketing Officer, R S Srinivas Jain, told reporters here today.

"We believe there will be a lot of retail participation and over a period of time we should have a substantially large fund," Jain said.

SBI GETS will be listed and traded on the National Stock Exchange (NSE) and would offer an unique investment property for investors who wish to invest in gold.

"Given the uncertainty in the global economic environment, gold as an asset class offers an excellent hedge. Gold ETF is the most efficient way of owning this asset. It is an intereresting option to enhance portfolio diversification," SBI MF Chief Investment Offficer, Navneet Munot, said.

There is a huge potential for gold ETF as industry exposure is estimated at Rs 700-crore, whereas the country has 13,000-tonnes worth quantity of physical gold, Munot said.

"With minimum initial investment of Rs 5,000, and with each unit of SBI GETS approximately equal to 1 gram of gold, investing in gold would be well within the reach of retail investors," SBI Mutual Fund's Managing Director & CEO, Achal Kumar Gupta, said.

SBI GETS is an open-ended Gold Exchange Traded Fund, which would invest in gold and endeavor to track the price of gold. The investment objective of the scheme is to seek to provide returns that closely correspond to returns provided by price of gold through investment in physical gold.

The scheme will invest 90-100 per cent of its corpus in physical gold and gold-related securities. It can maintain up to 10 per cent of the corpus in debt and money market instruments. The scheme's benchmark would be the price of gold--the morning fixing by London Bullion Market Association.

The gold ETF will offer two plans--A and B--catering to retail and institutional investors, respectively.

The subscription to the scheme, launched today, will close on April 28.